On 19 March 2019, the Peru tax authority (SUNAT) issued a guidance (No. 011-2019-SUNAT/7T0000) regarding the determination of expenses and loss offsetting under the controlled foreign company (CFC) rules. The guidance clarified that:

  • The CFC passive income must be calculated under Peruvian law; and
  • When calculating a CFC’s passive income, prior years’ losses may not be deducted.

However, the  rules of the controlled foreign company of Peru is effective while  holding  at least  50% of CFC by a taxpayer and  this type of company have to be resident of tax haven or no or low tax jurisdiction.